RICHARD H. FALLON:
So I thank you for your spirit of
cooperation, and so we won't waste any more time. I will just say a very
few words of introduction about Michael Sandel. Michael is the Anne T. and
Robert M. Bass Professor of Government here at Harvard. Since he literally
needs no introduction, I may perhaps be
forgiven if I begin with a few words of digression. I have known Michael
for over 40 years. We met at a Rhodes
Scholar interview more than 40 years ago. All I remember about
him at that time is that he was
very badly dressed. That he had a Harpo
Marx hairdo, and that his life's ambition
of that time was to be the second baseman
for the Minnesota Twins. Now, more than 40
years later, he's not achieved that ambition. But he is often
described as a rock star, which I think might have
satisfied him just as well. Michael is the rare
celebrated public philosopher, who has a unique
capacity for presenting complex ideas to public
audiences all over the world. He's the author of six
books, which have been translated into 27 languages. His legendary Harvard
College justice course, which he's delivered to
more than 15,000 Harvard undergraduates
over the years, has been turned into a
public television series that has been
broadcast to tens of millions, tens of millions-- I find that just a
staggering figure-- people around the world. And unlike many
public philosophers, unlike many political
philosophers, he has a rare capacity to bring
public philosophy directly to bear on events of
pressing public importance. More than 20 years ago in his
book Democracy's Discontent, Michael wrote that the
predominant liberal approach of celebrating individual
rights and driving discussion of moral values and personal
responsibility to the fringes of our politics and away
from the public square would ultimately play
into the hands of, and here I quote, "those who
would shore up our borders, harden the distinction between
insiders and outsiders, and promise a politics
to take back our culture and take back our country." To the scope of
Michael's audience, I wouldn't be at all
surprised if Steve Bannon had read his book. I wish Hillary Clinton
had read his book. I would be surprised if
Donald Trump tweets about it, but one never knows. Apart from Michael's
academic work and lecturing, he has served on the
President's Counsel on Bioethics from 2002 to 2005. More recently, he has
written equally trenchantly about the subject
of his talk today-- markets and morals. I could say more, but
like the rest of you, I am eager to hear from
Michael, who always enlightens and always surprises. And so without further
ado, Michael Sandel. [APPLAUSE] MICHAEL SANDEL: Thank you, Dick. Thank you. Thank you, Dick. We go back, as
Professor Fallon has said, for more than four
decades of friendship. And so it's a special
privilege for me to be introduced so
generously by Dick Fallon, whom I've admired for
all of those 40-plus years. And for whom I also
feel a great affection. So thank you for that, Dick. And thank you for coming. The subject I would like
to discuss with you today-- and I hope it will be
a discussion, which is why we're hoping that
people edge toward the center so we can hear one another. The subject is, what should be
the role of money and markets in relation to law? Increasingly in legal
academia in recent decades, legal reasoning has
been analyzed really as a branch of
economic reasoning. And when we look at the world,
legal and political practices are increasingly governed by
market thinking and market practices. And the question I would
like to put to you today is to what extent that's a
good thing or a worrying thing. Let me begin by
giving a few examples of the way in which money
and markets have just in the last couple of
decades come to inform various legal practices. Example one, if
you're ever sentenced to a jail term in Southern
California, just in case, you should know that if you
don't like the accommodations in the standard jail, you can-- if you have the money-- buy
a prison cell upgrade for-- you already knew that? For about-- it's
about $100 a night. Depending on how
lavish the facilities, you could pay twice that much. In fact, there are city jails
that in order to boost revenue advertise for customers. Seal Beach is a town in
California with such a jail. And they run ads in newspapers
advertising themselves, looking for business. Seal Beach Detention Center. Why spend your jail
sentence of 365 days or less at the county jail? We offer the
following amenities. This is from the ad. "Work release, flat screen
TVs, computer media room, clean facility, new beds." And then it gives
you the place you can call or email to inquire
about further details. They call it "pay to stay." That's example number one. Here is a second example. Suppose you want to sit in on
an oral argument before the US Supreme Court. Let's say you're a
member of the public. You're not a member of the bar. You want to go. You're on a trip to
Washington with your family. Often, especially for big cases,
there are very long lines. You've got to wait
for a long time. And for really big
cases, the line starts forming three,
four, five days in advance. A lot of people who want to hear
Supreme Court oral arguments don't like to stand on long
lines waiting like that. And now there is a solution. You can go to a company,
pay them $50 an hour, and they will hire someone-- find a homeless person or
someone who needs the job-- to stand in the line for you. They'll pay that person maybe
$10, or $12, or $15 an hour to wait for you to listen
to the oral argument. In fact, in the
same-sex marriage case, which was one of the most highly
sought cases for attendance, the line started
five days in advance. And if you work it
out, $50 an hour, five days, many
of the people who got to sit in to
the oral argument in the same-sex marriage
case paid as much as $6,000 for the privilege. The leading company that
provides this service is called linestanding.com. They, too, have an ad. You go online. "Helping you out
against the crowd. We provide persons to stand in
line anywhere in the greater Washington DC area. We specialize in US
congressional hearings as well as the US Supreme Court." So they provide a service. Paid line-standing at
the US Supreme Court. That's the second example. Third example, if you're looking
for an asset class that is not correlated to the general stock
market, as many people do, you can now invest in
other people's lawsuits. And this is a growing part
of the financial industry, the financialization of the
economy over the past 20 years. Litigation finance it's called. So for example-- it was a known
practice for personal injury lawsuits some years ago. Increasingly, the companies
have begun investing in commercial lawsuits. But to take an example of a
well-known Fox TV personality, he recently reportedly settled
a sexual harassment lawsuit for a reported $32 million. If you were looking
for an investment, you could go to the person
who had been aggrieved, or alleged the offense,
maybe couldn't afford the full cost of the
legal case, and you could buy a piece of that lawsuit. And you could
invest in an equity share in that person's
grievance against the Fox News personality. And in exchange for a
share of the winnings, typically 30% to 40%, sometimes
50% of that $32 million. So litigation finance. That's a third example. Now, in a moment I want to
get your thoughts on these. Let me give you a fourth. Paying criminals not
to commit crimes. This is a new practice
that has arisen in some communities
that are struggling with ways to prevent crime. Pay criminals-- provide
them a cash incentive-- not to commit crimes. The modeled program
for this developed in Richmond, California,
which actually had a very high murder rate-- 11 times that of New York
City not too long ago. There's a program there where-- it turned out that a relatively
small number of people were committing these crimes. So they said, let's find them
and pay them not to do it. And they have a
program that pays the criminals $1,000
per month if they don't commit any crimes. And also they have to
develop a kind of life plan that involves some hope of
pulling themselves together. And many cities-- it did
result in Richmond, California in a sharp reduction
in the murder rate, the $1,000 payments. And many other cities,
including Washington, DC, had been debating whether
to enact a similar program. So I'd like just to begin to see
what you think about these four examples of the use of money or
market incentives in the law. Should we worry
about this trend? Or is it, instead, the
welcome application of market reasoning and
efficiency considerations, market rationality to vexing
legal problems or public needs? So we've got the "pay to
stay," the jail cell upgrade, paid line-standing
at the Supreme Court, investing in other
people's lawsuits, paying criminals not to kill. Which, if any of
these practices, do you find objectionable? We'll do this just by
a quick show of hands as I run down the list. Raise your hand if you find
this program objectionable. Let's start with "pay to
stay," the jail cell upgrade. Most people object to that. Paid line-standing at
the US Supreme Court. Fewer people object to that. Investing in other
people's lawsuits. Also roughly divided. Only a minority I think object. Paying criminals not to kill. Even if it works? All right. Let's start with the last. Is there someone who finds
all four of these cases objectionable? Is there someone who
objected to all four of them? There must be. Only a handful of people. Let's start with the program
of paying the criminals $1,000 a month not to kill. And it'd be interesting
to hear objections and then replies to
those objections. I should tell you
about this program. They interviewed
the guy who runs it. And this is what he said
when people pressed him with some objections. "This is controversial. I get it. But what's really happening is
that they're getting rewarded for doing really hard work. And it's definitely
hard work when you talk about
stopping picking up a gun to solve your problems." That's not easy, at least for
the people in the program. And then they interviewed
one of the people in the program, a
recipient of the money. "The money is a
big part," he said. "I can't count the
number of times it has kept me from doing
what I've got to do." That was his phrase. "It stopped me from going
in to hit that liquor store. And it's a relief to
not have to go do this and endanger my life
for a little income"-- robbing the liquor store
because he's getting the money from the program. And then they described
the somewhat mixed results. Not everyone stays
on the program, but one of the leaders of the
program concluded as follows. "We don't have
any model fellows. We're not graduating
law students here. All we're trying to do
is to get these guys to stop killing each other." So the goal is it's relatively
modest for its success. So let's take that one again. So how many-- on just that
one, how many object to that? To paying. And how many don't object? How many think that
that's worth trying? Well, let's start first
from someone who does think it's worth trying. What would be your reason? Yes. All right. Go ahead. AUDIENCE: The proposition
is framed in this way, if it is framed in
this way, that you are trying to prevent criminals
from being criminals again. In other words,
that's recidivism. In other words, if you're
trying to prevent people from continuing in
a life of crime, then that would be a good thing. MICHAEL SANDEL:
It's a good thing if it were-- let's
say that it does work. Now, the first year it cut
the crime rate dramatically. Wait, wait, wait. The crime rate did climb
a little after that. Subsequently it went
back up, but still below the initial level. So let's assume that it works. So you would say,
if it works, it's a way of cutting the crime
where everyone benefits. So why not? AUDIENCE: Yeah. MICHAEL SANDEL: All right. Let's hear-- all right. That's a pretty straightforward,
plausible argument. Do you object or
you agree with it? AUDIENCE: I agree. MICHAEL SANDEL: All right. You agree. Tell us why. AUDIENCE: I think in
addition to the money, it's important to
focus on the way the program worked in practice. In drug trials, for example,
the people getting the placebo often respond positively
because of the attention that they get that they
wouldn't otherwise get. So I suspect here that
in addition to the money, you're taking these
people, talking to them, working with them-- MICHAEL SANDEL: They do. AUDIENCE: --and really trying
to turn their lives around. MICHAEL SANDEL: Right. AUDIENCE: So it's the money, but
it's more than just the money. And the money seems to be
an appropriate motivator under these circumstances. MICHAEL SANDEL: OK. Yes. And what you've
described is the case. There are people who work
with them and counsel them. All right. Jim. JIM FLEMING: Michael,
would you clarify? Is this a government program
or a private initiative? MICHAEL SANDEL: Is it
a government program or private initiative? Would that decide how
you vote, by the way? JIM FLEMING: I will
still be against it, but I would think about it. MICHAEL SANDEL: You'd be
against it in either case. Well, in DC, the city council
voted to adopt such a program. The mayor disagreed. So there's a conflict. So it is a public program. Although the money to
pay the $1,000 a month in the California case comes
from private donations, as a way of lessening
public objection to it. Although in principle, it
could be from public funds. So it depends on the
place where this is-- some have been from
private donations, but it's publicly sanctioned. And you're against either way. So do you want to articulate? Let's get professor
Fleming the mic. So give us the grounds
of your objection. JIM FLEMING: Well, I might
view it slightly differently if it's a private initiative. I would then view it like an
institution of civil society rising to help address
problems that government may not have the commitment to
or the resources to address. But I'm troubled
by it, because it does seem to be displacing a
governmental responsibility directly to address
these social programs. And it borders on seeming
like a form of extortion by the would-be criminals. MICHAEL SANDEL: Extortion. You pay me $1,000, and I
won't kill and create mayhem. And does the monetary payment
seem like-- well, it's paying extortion. Or is it bribing the criminal
not to pick up a gun? JIM FLEMING: Both
formulations seem apt. MICHAEL SANDEL: OK. So Jim Fleming says it's kind
of extortion and bribery, and that's morally
objectionable. And sometimes extortion
does work to stave off the thing you're worried about. But it's nonetheless
morally objectionable. JIM FLEMMING: Right. And it may be displacing better
governmental efforts to address the underlying problems. MICHAEL SANDEL:
Although in Richmond, California, those governmental
efforts, such as they were, led to 47 murders a year in
a relatively small place. This is near Oakland. What do you think? PROFESSOR FELDMAN: So I didn't
think it was-- do you want it? I didn't think it was
objectionable at all. I think it's actually
quite brilliant, but it's all about
how you describe it. I would not call it a program
to pay criminals not to kill. It's a new scholarship. It's a new scholarship. Now, part of the criteria
is you have to have committed crimes in the past. MICHAEL SANDEL: To qualify
for the scholarship. PROFESSOR FELDMAN: See,
because what you're saying is you're trying to create a
different level of incentive. For some of the
folks, of course, it's not going to be enough. But for some of the
folks, whether it's because they're
getting that attention, or whether because they're
getting that $500 now, you're saying, this
is what we expect of you as a member of society. And we will give you some money. I think Jim's thing of
is it government or not-- I actually think
because it is useful, I'd be fine if it's government. I just think the
taxpayers may not like it. So it's good to do a public
private partnership for this. MICHAEL SANDEL: OK. All right. Let's hear now-- so we have had
a very robust defense of this. Now we need to hear from someone
who is against it in principle. Yes. Tyler. Hi. Stand up. TYLER: Thanks. It's cool to be here. I think that in a civil
society we're very concerned, or at least we
should be concerned, with communal values. And so I'm really interested
in the communal values that are displaced by
a monetary incentive. In other words, if a criminal
is paid to not commit a crime, then they choose to
not commit the crime because of something
individualistic, because of something like
a personal incentive-- whereas ideally, I think
people should not commit crimes for the sake of the success
of the society, which is more of a communal approach. MICHAEL SANDEL: So they're
desisting from crime for the wrong reason-- TYLER: Yeah. MICHAEL SANDEL: --if it's
to get the scholarship, rather than because
it's wrong to kill. TYLER: Right. MICHAEL SANDEL: Well, Professor
Feldman, what about that? That's a pretty strong argument. Isn't it? PROFESSOR FELDMAN: Sure. MICHAEL SANDEL: Do we
have another microphone? Here. PROFESSOR FELDMAN: No,
that's absolutely correct. And ultimately, you would
want someone acting in society for those communal instincts. But if you have someone who's
not, what are you going to do? Are you just going to
let that person be? Or are you going to
try to bring them into that societal
way of thinking? And to me, it's better to try
to bring them in in some way. MICHAEL SANDEL: All right. But here I am guessing
what Tyler would say, and also Jim, who said it's
really a kind of extortion or a bribe, if your goal is
to educate or educate people into the norms of a
civilized society, aren't you teaching them the
wrong reason not to kill? I think that's what I'm
hearing in Tyler's defense. PROFESSOR FELDMAN: And I
think that's why I thought about this scholarship idea. It's all about how-- no, really,
how you frame it to the person. Do they really say, we want
to pay you money not to kill? Or are they saying here, we
want to bring you into something where we will give you
alternative income so you can leave that job you've been
on, and we're now training you to a different job. That's what I think,
that so much of this is about the framing. MICHAEL SANDEL: Yes. AUDIENCE: I think it gives
exactly the wrong incentive for the first murderer. He'd have to go out
and work for a living. But now he can just kill
one person for free, serve his time, and he gets
$1,000 a month for life. Who wants a program like that? MICHAEL SANDEL: Right. So you're afraid that some
people, law-abiding citizens, will say, I want to qualify
for that scholarship. I'll pick up a gun. By the way, it's not for life. It runs for 18 months. You can't be on it for-- the scholarship has
a limited duration. Yes. AUDIENCE: My concern is it
replaces morality with money. MICHAEL SANDEL: Well,
you've got to say more then. That's a provocative thought. What do you mean by that? How does it replace
morality by money? AUDIENCE: It defines
a comfortable life-- MICHAEL SANDEL:
Put the mic closer. AUDIENCE: It defines
a comfortable life as consisting solely of money. And it guides society with
money rather than any morality. MICHAEL SANDEL: So that's
what makes it wrong? AUDIENCE: Yes, sir. MICHAEL SANDEL: So you would
agree it's a kind of a bribe? AUDIENCE: No. More than that. MICHAEL SANDEL:
Worse than a bribe? Extortion. AUDIENCE: No. It displaces the morality
of the whole society. MICHAEL SANDEL: It displaces
because it suggests that the reason we should
treat one another with respect, or at least not
kill one another, is for reasons of money. Not morality. AUDIENCE: Yes, sir. MICHAEL SANDEL: OK. So we've defined I
think the question here, which is whether a
monetary incentive that seems to work to
achieve the goal may nonetheless be
objectionable if it promulgates the wrong lesson, sends
the wrong moral message, substitutes morality for money. Now, not everyone agrees
that this program does that, but that's the issue. That's the question. I'd like to shift to test
that tendency, or the worry, that especially in
the area of the law it's a mistake to let money
drive out, or corrupt, or crowd out morality with
a less freighted example-- a more mundane case to
do with parking tickets. Now, in downtown Boston, there
are not enough parking places. And there aren't places enough
even for delivery trucks to stop-- UPS trucks, FedEx trucks. And so it's a common practice
that delivery trucks double park, incur the tickets-- a great many tickets per
week, especially per month, per year-- and they pay those
tickets conscientiously. And they consider it a
cost of doing business. UPS, over a couple of
years, in the city of Boston alone paid something like $1
million in parking tickets. They're abiding-- well, they're
violating the law in the sense that they get the ticket. They double park. But they're abiding by
the law in the sense that they pay the penalty
associated with it, and they say that's a
cost of doing business. It's as if they were paying
an expensive parking fee. Now, there are other
examples of this. In Massachusetts, there
was until recently a law, an item pricing law, that said
retail stores, grocery stores, and CVS and the like, had to
put a sticker showing the price of each item on the item--
it wasn't enough to post a sign over a shelf of goods-- to make sure that
customers were not cheated, knew the cost of each item. And for big box stores, it
was prohibitively expensive, or so they said, to
hire the people to put a price sticker on each item. And so they incurred the
fine on a yearly basis, which was much
less than it would have cost them to hire
the people to comply with the item pricing law. Now take these examples. Companies who willingly and
conscientiously pay the fines, say the parking tickets,
here's the question. Had they done anything wrong? How many say that,
no, they've complied-- they've violated the law,
but they've paid the fine. And at the end of the day,
they've done nothing wrong? How many would say that? And how many would say, even
after they've paid the fine, they've still done
something wrong? DANA: Of course. MICHAEL SANDEL: Dana. AUDIENCE: Pay the fine for what? AUDIENCE: For doing
something wrong. MICHAEL SANDEL: Wait, here. Go ahead. DANA: It seems to me that
they paid a fine because they did something wrong. MICHAEL SANDEL: But after
they've paid they complied. DANA: It doesn't
make the act right. The moral value of
the act isn't changed by having served the
sentence or paid a fine. MICHAEL SANDEL: Hold it closer. They can't hear. Say it again. DANA: I don't see how you're
cleansed of moral guilt simply because you have gone
through a rehabilitation program. MICHAEL SANDEL: Well,
rehabilitation-- they've just paid. They've written a check. DANA: Understood. MICHAEL SANDEL: They've not
been- they carry on doing it. DANA: Yes. Why would we evaluate
the act differently? MICHAEL SANDEL: OK. What do you-- here. Go ahead. AUDIENCE: Again, on the
pricing on each item. That may or may not
be a good decision, and I have some questions
on whether it's good. But the state cited that
this was a good thing, and the company should comply. Just paying the
fine isn't what-- the government is saying, this
is something we want you to do. Yes, they're being fined. But I don't view that as being
a reasonable cost of business. MICHAEL SANDEL:
So it's a mistake? AUDIENCE: If they
don't like that law they could lobby against it. MICHAEL SANDEL: Right. AUDIENCE: And we probably
did, and they lost. And so I think the obligation
is to follow the law, and they should hire the people. And if that causes prices
to go up in the store, then increase the prices. And if people complain, they
can complain to the legislature all the prices are up. MICHAEL SANDEL: Sure. AUDIENCE: But I
think just paying the fine isn't what
the legislature is telling companies to do. They're saying, put the
prices on each item. MICHAEL SANDEL: So they're
wrong to treat this as a cost of doing business. AUDIENCE: Yes. MICHAEL SANDEL:
What do you think? Yes. Go ahead. AUDIENCE: I think the
companies like FedEx and the UPS trucks don't have
an alternative-- that their goal is to deliver a package. Of course, they should
lobby the legislature to give them a waiver
so they can double park for x number of
minutes, which I thought was the case in New York. And I may be wrong,
but I think they are allowed to double
park for 15 minutes, because their goal is
to deliver a package. I don't think they have an
alternative but to do this in order to carry out their job. MICHAEL SANDEL:
And so what do you say to the people
who have said-- and Dana said it's
obviously wrong. They've broken the law. And it's a mistake
to just say, well, paying a fine is just
like paying a fee. AUDIENCE: I don't think they
have an alternative that's workable in order for
them to keep their jobs and carry out their employment. MICHAEL SANDEL: What
do you think, Ruben? RUBEN: So I do think
that this goes back to the morals question. MICHAEL SANDEL:
Money and morals. RUBEN: Yes. And if I could just frame it
a little bit differently-- one of the things that I've been
involved with professionally is the trading of
emission permits. Now, there is a
certain way of looking at it that says, if
you really do have to have a certain
amount of emissions of pollutants in a particular-- if you really do have to have
a certain amount of emissions of a particular pollutant
in a given system, it makes a certain
amount of sense to sort of auction
off the permits. And you can say, look, you're
buying a permit to emit. And it's got to be worth
enough to you to pay x amount. And if there is
more demand for it, you're going to pay two
times x and so forth. And nobody is saying that
what you're doing is wrong. It's just that we can only
allow so much of it to happen, and you're going to have
to buy it if you want it. And if you can't
justify that, you must be doing something wrong. I don't think that
the double parking situation is analogous to that. We are not saying you can
have this much double parking provided that you pay. We're really saying you
shouldn't double park. If what we're really doing is
selling permits to double park, we should have a discussion
about whether that is the right social policy. If that is not the right
social policy, then no. It isn't OK to just
pay the ticket. The ticket should be two
times, or three times, or four times more until people,
in fact, stop double parking. MICHAEL SANDEL: Because
the ticket, the fine, embodies a social judgment
that this is wrong. RUBEN: Correct. And for that very
reason I don't think that if a person goes
to jail after they've committed a murder that
somehow makes it all OK. It isn't OK. The fact that you
have to pay a penalty or suffer some
form of punishment doesn't mean that
you've expunged-- MICHAEL SANDEL: The wrong. RUBEN: The wrong. MICHAEL SANDEL: But here the
question is, is there a wrong? Wait. Keep the microphone, Ruben. You raised the analogy
of carbon trading, which you say we should consider
more like a fee than a fine. RUBEN: Correct. MICHAEL SANDEL: What about
laws against littering? Suppose that I violate
the law against littering. I toss a beer can
out the car window as I'm driving down the highway. Now that's-- what's that? AUDIENCE: You've broken
two laws, because you're drinking while driving. [LAUGHTER] AUDIENCE: Is it empty here? MICHAEL SANDEL: No. Suppose I'm pulled over, and I'm
issued a ticket for littering, and I willingly pay the ticket. As willingly as the UPS
company pays its tickets. And I consider it-- suppose I'm a person of means. I don't like to clutter
my car with beer cans. It's worth it to me to
be able to just toss the beer can out the window, and
I'm willing to pay the ticket. Or it's worth it to me to pay
the ticket, as the economists would say, discounted
by the probability that I'll actually be caught. And so how is that really
any different, Ruben, from a littering fee? RUBEN: I think it is different. Because when you're
driving, you often see signs that say
"littering $1,000" or some ridiculous number. And that's, in fact, because
they're trying to tell you, don't think you can
afford to do this. Now, if there
happens to be a guy-- if a billionaire developer is
driving his car and decides, I don't really care
how much it costs. I'm just going to toss it. He's still doing something
he shouldn't be doing. MICHAEL SANDEL: Even if he pays. RUBEN: Absolutely. Because we just simply couldn't
set the fine that high. MICHAEL SANDEL: Well,
there is a way to do it. Wait. There is a way. I've heard of a way to do this,
and they do this in Finland with speeding tickets. Because there are some people
who speed with impunity, because they're wealthy. And if they get a
ticket, they can pay it. And so in Finland, they set
speeding tickets in relation to the income of the offender. And they ask for
your tax return, and they set-- it's true. And there was a
guy, a wealthy guy-- I think he was one of the
heirs of the Nokia company-- who was speeding
way above the speed limit, and he got a ticket. And I think it was the world's
most expensive speeding ticket. It was $17,000 or
something like that. So there is a way of doing it. And one day I suppose-- RUBEN: I still think-- let me give you a slightly
different example. In the area of corruption,
Foreign Corrupt Practices Act type enforcement, there is
this concept of ability to pay. And-- MICHAEL SANDEL: So the
fines are sensitive to the-- RUBEN: Right. MICHAEL SANDEL: So
that's analogous. RUBEN: If it's going to
put you out of business, if it's going to completely
put you out of business, there is a view--
there's a policy-- that you shouldn't have
to pay more than that. MICHAEL SANDEL: OK. I got it. So what we're getting
at here is the question of whether there is a
distinction in principle between a fine and a fee. And it comes up often in law
and also in everyday life. And it goes to this question
about money and morals, whether they are commensurable. If they are, then there
is no difference, really, between a fee and a fine. All fines are just
costs of doing business. And yet we hesitate to embrace-- most of us-- the
full implications of that commensurability,
of markets and morals, of fines and fees. It comes up all the time
even in everyday life. Not in exalted questions
of policy and law. A couple of years ago, I
was visiting my son who was doing research in Uganda. He studies chimpanzees
in the wild. And I went to visit him, and
we went to a national park. And we were touring the park. And as in these places,
you're straining to see the really
interesting animals, hoping you will see lions and so on. And the driver of
the vehicle, a local, was hoping to drive into
areas where we could see the really interesting animals. And there are signs
on the dirt road going through this
national park saying "off-road driving prohibited. $250 fine." And the driver instantly
looked at that sign, and he said, what that
sign says is it's not prohibited to drive off road. It just costs $250. So he had a view about the
blurring of the distinction between a fee and a fine. Or even consider
a library fine-- they fine you when you
turn the books in late. They call it a fine. And it seems to embody,
as Ruben was suggesting, a moral sanction. But compare that--
this sort of dates me, but I remember when they
had video rental stores before streaming,
like Blockbuster. Some of you here remember that. And you would go and-- my undergraduates would not. They'd say-- what? But if I would return videos
late to the video store, you had to make a payment
for the late return. And the people
behind the desk often would sort of scowl
at me, as if I should feel guilty for
returning the video late. I thought the scowl
was misdirected, because I thought
they were confusing a video store with a library. And I sort of said
to myself, I'm not going to slink in here
feeling guilty returning this video late. This isn't Widener Library. It's Blockbuster. You're in business
to make money. So if I pay a late fee, you
should consider me a better customer, not a worse one. On the other hand, if you
would have that same attitude with the public library in your
town, or with Widener Library, then you might be missing
something of the distinction between a fee and a fine. Because you're
depriving, I suppose, members of the public of
access to a book that they're waiting for. On the other hand, I
do incur library fines. I suspect Dick Fallon doesn't. But I do keep books-- have you ever? RICHARD H. FALLON:
I'm too cheap. MICHAEL SANDEL: For reasons of
economy, he said he doesn't. But I've had library
fines, and I consider it a cost of my research, like
the UPS cost of doing business. So I paid the fine to Widener. And then I tried to submit
it as a research expense for reimbursement month. And they turned it back. They said, no,
you can't do that. So I think they were
upholding, probably rightly, the distinction between
a fine and a fee. But you can see how, whether
in everyday life or in the law, this matters. And it's very much at stake in
the broader question of what should be the role of monetary
incentives and market thinking, in designing rules,
policies, and legal systems. Consider a more fateful,
more consequential example. In Switzerland,
a couple of years ago, they had to
figure out a way to accommodate a certain number
of refugees, mainly from Syria. And the Swiss parliament,
the government decided to accept
a certain number. And to allocate each
town in Switzerland, in accordance with its size
and capacity, a certain number of refugees to accept. There was one small Swiss
town-- about 22,000 people, quite affluent-- that said, we don't
want refugees here. And we are willing to pay
the fine under the law, which was close to-- it was a considerable fine. Close to $300,000
US dollars per year for turning down their
assigned refugees. They were only
assigned 10 refugees. And they said, we don't
want to take them. We are willing to
pay the $300,000. And it was the result
of a referendum. By 52% to 48%, the town
decided democratically, we would rather pay the fine
than take in these refugees. Now, they paid the fine. How many here--
let's see what people think about the Swiss town. How many think that the Swiss
town complied with the law, did nothing wrong? They turned down the refugees,
but they paid the fine specified under the law. How many think that what
they did was objectionable? Let's put it that way. And how many don't? How many think that what
they did was acceptable? Not objectionable. OK. Get us started and tell us why. AUDIENCE: I think the overall
distinction in all these things is between malum
prohibitum and malum in se. So it depends upon
having some moral code separate from the
law by which you are judging these various laws. MICHAEL SANDEL: It
depends on having some moral code
or moral principle separate from the law
by which you're judging. And you think that there
is no such moral principle? AUDIENCE: No, no, no. No, no, no. So for example, I would say
that paying people not to murder is wrong, because
murder is malum in se. Whereas accepting fines
for double parking or for returning a video
late to Blockbuster, that's malum prohibitum. MICHAEL SANDEL:
And the refugees? AUDIENCE: And the refugees-- I don't think that they
have a moral obligation to accept the refugees. MICHAEL SANDEL: The town? AUDIENCE: Right. That's my own personal view. I understand that people who
have a different morality would come to a
different conclusion. I'm not saying there
is no moral code. I'm just not trying to impose
mine on everybody else. MICHAEL SANDEL: Yes. OK. Did we get you a microphone? Oh, here. We've got one behind you. AUDIENCE: I think it's
wrong to deny the refugees. And I thought all
of your examples, the first one you gave, are
wrong except for the third one. I think when we belong to
a community or a society we assume certain obligations,
to behave in accordance with the norms of the society
that are fairly decided. And when people get
paid, or are allowed to pay to avoid
those obligations, it diminishes the power of
the obligation of everybody else in the community. And I think that it impoverishes
this communal sense that is the thing that allows
communities to exist. MICHAEL SANDEL: You spoke of
a norm being violated here. Is the norm the humanitarian
norm of taking in refugees? Or is the norm the norm of
abiding by the law enacted by the Swiss government? AUDIENCE: I think
it's the latter. MICHAEL SANDEL: So
they passed a law. They assigned the quotas. On the other hand, they also
set a fine for not accepting. The town paid the fine. So they've not abided by the
law having paid the fine? AUDIENCE: I
understand the point. It still feels wrong to me to
be able to buy your way out of a communal obligation. And once we allow people
to buy their way out of communal
obligations, what does it mean to be part of a
community or a society? MICHAEL SANDEL: Yes. Thank you. Yes. LUNA: I think it also ends
up creating inequality. You're basically
saying that whoever can afford to pay
these prices get to exercise their
morality as they choose, while the companies
that can't afford can't exercise their
morality as they choose. MICHAEL SANDEL: It is true. You're suspecting this is a
wealthy town, and you're right. There were some 300
millionaires in that town. It was a pretty well-off town. There are really
two objections here. One of them is about
not buying your way out of a communal obligation,
not allowing money to drive out morality, or moral
motivations, or social norms. And a different
objection has to do with inequality and unfairness. Not every town-- may I press
you on that a little bit? This was a wealthy town. They could afford it. Other Swiss towns might
not be so wealthy. They couldn't afford the
luxury of paying their way out of the refugee quota. Do you think that if the-- hypothetically-- if it were
a roughly equal society where all towns had similar
means, then it would be OK? LUNA: No. I think this is a
secondary argument. But I believe that there
is a moral obligation to accept the refugees. MICHAEL SANDEL: OK. So it's a secondary argument. It is interesting that there are
two arguments, two objections, that arise in debates
about whether communities or individuals who go
to the littering case should be able to
buy their way out of norms set down by the law,
or for that matter, moral norms. One having to do with
the unequal distribution of resources and the unfairness
if rich people toss beer cans. But then that isn't-- what's your name? LUNA: Luna. MICHAEL SANDEL: Luna. But as Luna points out, that's
not really the only objection. Because in the littering
case, too, if we said, suppose everyone could afford
to litter and pay the fine. Or suppose everyone
could afford to speed, as in they graduated speeding-- fine the system,
then would it be OK? And Luna is saying, well,
no, not necessarily. Because there is
this background norm that's independent of the
distributive consideration, the fairness consideration. Yes. AUDIENCE: Even in American
law, we have distinctions as to different sanctions. You have the felony-- MICHAEL SANDEL: Hold it closer. AUDIENCE: You have the felony,
you have the misdemeanor, you have the fine. And the legislature is capable
of making these distinctions. They have made
distinctions, for example, that murder is a felony. And that certain other
things are misdemeanors, and certain other things are
only to be paid in fines. In fact, the normal
collection of fines are done administratively,
in most cases, and not with a full
court penal plea. And that there are
probably many more things which are deemed
communally immoral, but there is no sanction. The legislature
goes back and forth over the years as to what
is to be criminalized. And that if you're really
serious that something ought to be done, you
could criminalize it. For example, you could
arrest the driver who has double
parked, and you could charge him with a misdemeanor. At that point, it's
not a cost to business. Because the moral decision
has been legislatively made that you're a criminal. To the extent that there
is only a civil fine, it's a much grayer aspect
to the whole thing. MICHAEL SANDEL: So
how did you vote in the case of the Swiss town
that turned down the refugees? AUDIENCE: Well, to that
point, the legislature sort of set it up with a civil fine. It's not that different
from Obamacare where you can opt
out by paying a fine. It's a tax according to the
United States Supreme Court, which they did to
make it legitimate. But in effect, the people who
are opting out of Obamacare by paying the fine-- MICHAEL SANDEL: All right. So in the case of those
who pay the fine-- that the Swiss town
paid the fine-- having made that choice,
they've abided by the law. Have they? AUDIENCE: Yes. MICHAEL SANDEL: Because
they paid the fine? AUDIENCE: It depends. If the law was such
that there was also an ability for the Swiss
government to bring the town fathers up, and to, let's say-- MICHAEL SANDEL: To
put them in jail. AUDIENCE: --put them in jail. Then I think it would
have been different, because it was a different
determination, collectively, as to the level of wrongness. MICHAEL SANDEL: All right. The level of wrong. We've been distinguishing
between fines and fees. The fine that the Swiss town
paid-- the monetary payment was a fine. And we've been debating
whether they did wrong even after they paid the fine. Here's a way of pushing
on the distinction between a fine and a fee. In relation to the
refugee question, consider the question
of allocating refugees, not once the rules are already
in place, but at the point when a legal body, or a
political community, is trying to decide how to
allocate refugee quotas. The European community
has been struggling with this-- trying to persuade
member states to accept a certain number of refugees. And there are negotiations
among countries about this, just as there are negotiations
among countries about carbon emissions reductions. But in the case of
the refugees, the EU is trying to persuade
countries to accept greater numbers of refugees. One law professor
proposed a market solution to make countries
readier to accept larger numbers of refugees. Set the quotas
based on the wealth and capacity of each country. But include a
provision in the global or in the EU level agreement-- include a provision
that allows a country to satisfy its obligations
under the treaty either by accepting its
assigned number of refugees or by paying some other
country to take them. So the idea of the
proposal is to incorporate a market mechanism,
tradable refugee quotas, as an option for countries. Now, the argument advanced
by the law professor-- creating a market for
refugees in Europe-- was that countries will
accept more ambitious quotas if they know they can
either accept those refugees or hire some other country
to take them instead. Some will object, the
law professor wrote, that the market element
offends morality by commodifying refugees. But if trading
protects more refugees than the status quo
does, the newly-protected will surely welcome it, just
as environmentalists now endorse the trading of
pollution rights, which goes back to Ruben's example. So what do you think? Let's see what people
think about this proposal. Now, this is not a
question of compliance. It's a question of what the rule
should be in the first place-- whether you would
favor or oppose the tradable refugee quota
provision in the agreement to set the quotas. How many would be in favor
of tradable refugee quotas if it would lead to countries
accepting larger quotas? Let's add that if. And how many would be opposed? So the majority are in
favor, even including some among us who worry about
money driving out morality. All right. So the minority here object. So let's start with
the objections. Why would you object? Why would you object? Dana. DANA: Probably because-- MICHAEL SANDEL: Here. Let's get-- DANA: One basis
for objection would be that the outcome
would be probably the opposite of what you
want from a public policy perspective, where the
jurisdictions least able to handle the
refugee flow would be the ones most burdened. MICHAEL SANDEL: Poor
countries who need the money. But suppose there were certain
minimal standards of care that could be enforced-- all right. Then? Wait, wait. What about then? DANA: Well, it
depends how much-- now you're getting into details. If you-- MICHAEL SANDEL: Not details. They have to be
treated decently. They can't be abused. DANA: If they are
assured of conditions that are equal to
first-world conditions, then I would reconsider. MICHAEL SANDEL: All right. Who else has an objection? An objection in
principle to this. Who finds it morally troubling? Yeah. AUDIENCE: Well, I thought we
were just doing hand-raising, but sure, I'll talk on that. I think one question I have is
whether the first instance-- the moment of commoditizing
the refugees in fact devalues them in a way that
makes the result that more are taken in. It kind of undermines
the increased value in a moral sense,
because the mechanism that got you there was kind
of inherently devaluing the people. MICHAEL SANDEL: You came
with the price on your head, and that's demeaning you feel? DANA: Yeah. MICHAEL SANDEL: It's
demeaning of the refugees that they be haggled
over, bought and sold. What about that? Yeah. AUDIENCE: Starvation and
death will be demeaning also. MICHAEL SANDEL: Starvation
and death are demeaning also. There'd be fewer
homes for refugees. AUDIENCE: If it's a choice
between accomplishing the same practical goal in
a better or more morally elevating way and a less
morally elevating way, then yes. Let's opt for the more
explicit elevation of all of the participating
countries' values with respect to refugees. But if it is as stark
a choice as you posed, then it's very hard having
a moral conversation that says moral perfection
trumps human salvation. MICHAEL SANDEL: Do you disagree? All right. Miss Luna, what do you think? AUDIENCE: And if so, how many
people should die for the sake of moral perfection. MICHAEL SANDEL: OK, Luna. You've got your work
cut out for you. LUNA: I know. I think it has to do with the
values that we want to promote. And in the long term, I think
that this policy is basically treating the refugees as a
burden to be dealt with and not as human lives. So it's not just
about the numbers and how many lives
get saved in the end but how much these
lives are valued. Not as burdens, but as
lives that have to be saved. MICHAEL SANDEL: So it's treating
the refugees as burdens. There is some symbolic
or expressive meaning to this market mechanism
that demeans the refugees and treats them as burdens. OK. Do you want to reply? Yeah. AUDIENCE: I would reply with-- MICHAEL SANDEL: All right. Go ahead. AUDIENCE: Would those who
subscribe to that view think the refugees would
make the same argument? MICHAEL SANDEL: OK. Well, what about-- let's
get another microphone. AUDIENCE: With the caveat that
at one point or another many of us, at least
ancestrally, were refugees. MICHAEL SANDEL: Right. So with the refugee, what if the
refugees themselves would say, put a price on my head. Consider me a burden
if it will make it more likely I'll find a place. What about that, Luna? LUNA: I ask myself
the same question. I think that what resolves the
situation in my mind in the end are the morals that we want
to promote as a society. I understand that the refugees
might make this choice, but I still believe
that as a society we should not make this choice. MICHAEL SANDEL: In the back. AUDIENCE: So several
times it's been suggested that providing a fee for
taking in the refugees somehow makes it less
appropriate, less morally elevated. And I wonder if those people
would ask the same thing about a nurse who gets
compensated for her care, or a teacher who gets
compensated for teaching. The fact is that we all
do many, many good things and get compensated for them. And at the same time, to take
in a refugee or a student has a cost. And to provide appropriate care,
those costs have to be met. So I think to allow
compensation is to encourage people
to be more caring and to provide appropriate care. MICHAEL SANDEL: Well
would you-- wait. Hang on to the
microphone for a moment. It is true that we pay salaries
to caregivers, to nurses. We pay salaries to
teachers, to professors. And yet, suppose we
wanted to increase the size of the
classes and offered to pay teachers more
who would accept more people in their classes. What about that? Would you be in favor of that? AUDIENCE: I think we see
it happen all the time. Our children went to the
University of Chicago, and some of those classes
were very, very large. But I'm not sure that's
the right context here, to the extent-- let me go to another
point that was raised that the refugees are burdens. Some are probably burdens,
some are probably assets. Frankly, you may have countries
bidding to get refugees. So I think the discussion
is partly acontextual, and I think that makes
it hard to really look at what the issues are. MICHAEL SANDEL: Yes. The woman in-- just
third row from the back. AUDIENCE: I was going to
say-- so for your analogy with teaching, the
marginal cost of teaching 100 students versus
80 students, it doesn't really make a
difference to the teacher. But I think-- I don't know for sure, but I
think with foster children, when people are put in
foster care, I think-- aren't the parents--
they're paid something to cover the cost of
the child, because you have to clothe the child. You have to feed the child. I think that's more
similar to the refugee. There are going to be costs
incurred to actually house people or care for people. In some meaningful ways
they have a chance. MICHAEL SANDEL: OK. Well, we've been discussing
the-- we've had two versions of a refugee question. One having to do with a law
already in place that specifies a fine for noncompliance. And then we questioned whether
that fine should be considered, so to speak, a cost
of doing business-- say, a democratic choice
available to that town. Or whether in
exercising that choice, by turning down the
refugees, that the town is doing something wrong. Some people argued that the
town was doing something wrong because it was failing to
answer to an obligation as defined by the
larger community. And then we took
another refugee case that also is about finding
more places for refugees, but where the law
is not yet in place. The rules are being debated. And the question there is
whether to use a market mechanism, the tradable
permits in this case, to implement the goal-- the desirable goal-- of finding
more places for refugees. In all of these examples-- whether the speeding
ticket, or the littering, or the library fine-- we've been pressing
on the distinction between a fine and a
fee as a way of testing the terms of relation
between market values and non-market values and
norms, that in some cases seem challenged, maybe
corrupted, or degraded by market value and exchange. That's the larger issue here. Now, economists often assume
that markets are inert. Inert in the sense that
they don't touch, or taint, or change the
meaning or the value of the goods being exchanged. This assumption
may be true enough if we're talking
about the buying and selling of material goods-- cars, toasters,
flat-screen televisions. If you sell me a
flat-screen television or give me one as a gift,
it will work the same. The value of the television
will be the same either way. But the same may not be
true outside the domain of material goods, commodities. The same may not be
true when we're talking about personal relations. Or social life, education,
dealing with the environment, deliberating about refugees-- may not be true in markets
and market reasoning entering in to the
domains of civic life, or journalism, or the law. In these domains,
it's not enough just to ask whether markets will make
transactions more efficient. It's not even enough
to ask whether there will be less emission, or
less litter, or more refugees accommodated. Those questions matter-- those
consequences, those outcomes. But among the outcomes
we care about when we're talking about law
and social arrangements, our attitudes and
dispositions, orientations toward the goods that constitute
social life, civic life, is society governed by law. And if that's true, then we
have to take into account the possibility that
in some cases at least, market thinking, market
valuation, and exchange, can corrupt or crowd
out non-market values worth caring about. There are examples of the way
this works in social life. There was a study done of
daycare centers in Israel. You may have read about this. It's by now quite
a famous study. Where they had a problem
familiar to day care centers everywhere--
parents coming late to pick up their kids. So with the help
of some economists, they instituted a fine
for late arrivals. What do you suppose happened? AUDIENCE: Everybody came late. MICHAEL SANDEL: More
people came late. Now, from the standpoint of
standard economic analysis, this is a puzzle. It's an anomaly. Because the price effect
on which economists and economic reasoning rely-- the price effect
says if you impose a price or raise the
price, fewer people-- not more people-- will consume that good,
will do that thing. Here, when they instituted a
fine, more parents came late. Why? Why was that? AUDIENCE: They saw it as a fee. MICHAEL SANDEL: They what? They treated the fine as if
it were a fee for permission. It conveyed permission. Before, when parents
came late, they felt guilty for imposing
on the teachers who had to stay with their child. But now, the monetary
payment, they treated the fine as if it were a fee. It was like a babysitting fee. And why feel guilty if
you're hiring a babysitter? You're paying for a service. Now, some economists will
say, well, what this proves is that the fine was too low. And to some extent that's true. If they set the fine
at a million dollars for a late arrival,
probably the price effect would kick in and swamp,
override, overpower-- what we might call the
crowding out effect-- the corrosive effect
on attitudes, norms, the obligation to show up. But that's not the point. The point is that the
price effect is not the only thing that matters. The reason there is
some crowding out effect is that the monetary
payment gives permission. It confers a certain
kind of moral judgment that changes the
nature of the practice, the meaning of showing up late. Attitudes change even though
you can override that if you make the fine big enough. One interesting thing
about this experiment is that when they discovered
this paradoxical result, they removed the fine. But the new increased
pattern of late arrivals persisted, which suggests that
once attitudes and norms are eroded, crowded out, it's not so
easy to turn them back on again as flipping a switch. And this is a cautionary note
about the corrosive effects that market thinking
and market reasoning can have on social
practices and on law. Now, this idea
that markets don't change the value of the
goods being exchanged-- this runs deep in the
economic thinking. So does another idea
that reinforces it. The idea that virtue,
or civic spirit, is a scarce resource
that we should try to serve by relying on
it to the extent we can. Years ago, a sociologist named
Richard Titmuss wrote a book on blood donations. And he compared the
system in the US and in the UK of
blood donations. In the US, you could either
give blood or sell it. In Britain, you were not allowed
to sell blood for donation, only for transfusion. You could only donate blood. He compared the two
systems, and he found-- this was in the early '60s-- that on efficiency
grounds, he found the British system was better,
actually more efficient. It delivered him a
more reliable supply, less tainted blood, and so on. But he also argued that it was
preferable on moral grounds. Because he worried,
or he hypothesized, that in the American
system where you could sell blood or give
it, the practice of selling would undermine the
altruistic attitudes associated with giving. That over time, fewer
and fewer people would give out of
altruism if there was a market system in place
that put a price on blood. One of the most
famous economists of the time, Kenneth Arrow,
wrote a critical book review of Titmuss's book about blood. And he found it puzzling
that the creation of a market for blood would
decrease the altruism embodied in giving blood. People are still
free, he argued, if they want to give
blood to give blood, whether or not somebody
else is selling it. There is no reason in
principle, Kenneth Arrow wrote, to assume that that
would have any effect. And then he made
another argument against relying
wholly on donation. He said, "the market has
the following virtue. It saves altruism for the
times when we really need it." Here's how he put it. "Like many economists,
I do not want to rely too heavily
on substituting ethics for self-interest. I think it's best on the
whole that the requirement of ethical behavior be
confined to those circumstances where the price
system breaks down. We do not wish to use up
recklessly the scarce resources of altruistic motivation." So this idea of the economy
of virtue runs deep. Now, a generation leader,
a famous Harvard economist, made a similar argument. He was actually
giving what they call the morning prayer in
the Memorial Church here at Harvard. And he concluded his
morning prayer as follows. "We all have only so
much altruism in us. Economists like me think of
altruism as a valuable and rare good that needs conserving. Far better to conserve it by
designing a system in which people's wants will be satisfied
by individuals being selfish and saving that altruism for
our families, our friends, and the many social problems in
this world that markets cannot solve. So the idea is that virtues
of benevolence, and sympathy, and altruism, and solidarity,
and virtue, even love, are in scarce supply
as if fixed by nature. Like the supply
of fossil fuels-- the more we use,
the less we have. We should avoid spending it down
too quickly or too recklessly. This idea runs deep. It's a kind of mystic
view of virtue. And you can see how it
fuels our faith in markets and helps propel their
reach into places where they don't belong. But the metaphor, it seems
to me, is misleading. Altruism, generosity,
solidarity, and civic spirit, these
are not like commodities that are depleted with use. More plausible, I think, is
to regard them as like muscles that develop and grow
stronger with the exercise. One of the dangers of
effacing altogether the distinction
between fines and fees, of construing legal
reasoning as simply a branch of market reasoning. One of the dangers
of doing this is to let these virtues, these
practices, these attitudes and norms languish rather
than to articulate them and to cultivate them. To really appreciate
the respect for law in a democratic society,
and for that matter, to find our way to a
vigorous public life animated by civic virtues, it
seems to me that we need to exercise and cultivate
these moral and civic sentiments more strenuously. And it seems to me that the
tendency, both in the academy to assimilate law to economics,
and the legal and political practices we've
discussed today that substitute market reasoning
for moral reasoning, contribute to the impoverishment
of a rich, democratic life. Thank you all very much. [APPLAUSE] Thank you. Thanks.
